There are several layers of disputes in the South China Sea: disputes over the ownership of islands, disputes over rights in the waters between the islands, disputes over the regional balance of power and disputes about the future of global governance. What makes them difficult to resolve is that many details of the rival claims remain obscure.

There are six claimants to the disputed reefs and rocks. China claims every feature within a ‘U-shaped line’ that it first published on an official map in 1948. These include the Paracel Islands in the north of the sea, the Spratly Islands in the south, Scarborough Shoal in the east and Pratas Island in the northeast. Taiwan – as the Republic of China – has the same territorial claim. Vietnam claims the Paracels and Spratlys. The Philippines claims most of the Spratlys plus Scarborough Shoal while Malaysia and Brunei claim a few features in the Spratlys only. Currently, China occupies all the Paracels, Taiwan occupies Pratas as well as Itu Aba in the Spratlys. All the other claimants, except Brunei, occupy at least five features in the Spratlys.

Rights in the waters between islands are generally governed by the United Nations Convention on the Law of the Sea (UNCLOS). UNCLOS was negotiated over nine years between 1973 and 1982 and, to date, has been signed by 167 states and ratified by 153 of them. The United States government signed UNCLOS in 1994 but, so far, the US Senate has refused to ratify it. China, Vietnam and the other claimants have both signed and ratified the convention. Broadly speaking, under UNCLOS, countries own the sea and the seabed up to 12 nautical miles (nm) from their coasts. They also own the rights to the resources in the sea and seabed – but not the territory – up to 200 nm (370 km) from their coasts: an area known as the ‘exclusive economic zone’ or EEZ.

UNCLOS lays out general principles for dividing territory and resources between rival claimants but leaves out some crucial details. One such is the exact point that an uninhabited ‘rock’, which is not entitled to an EEZ, becomes a full ‘island’ which is entitled to one. In the UNCLOS text, “Rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone”1 but UNCLOS does not define either ‘human habitation’ or ‘economic life’. This is a particular problem in the South China Sea because there is plenty of evidence to show historical patterns of temporary residence by fisherfolk on some of the disputed features but none to show that anyone ever lived on them permanently. Where does the threshold lie? The effect of the difference between a feature being classed inhabited or uninhabited is economically critical. A rock is entitled to a territorial sea of just 12 nm radius – 452 square nm. A full island is entitled to an EEZ of 200 nm radius, giving it resource rights over an area of sea at least 125,000 square nm. In the South China Sea, this has major implications for control of the fish and hydrocarbon resources.

China’s vague claims

The exact extent and basis of China’s claims in the South China Sea are still surprisingly vague, despite decades of discussion about them. The government of the People’s Republic of China has never given a full and explicit description of its precise claims or of their legal foundations. The best we have is a government statement of 12 July 2016, which sets out the following position:

China has territorial sovereignty and maritime rights and interests in the South China Sea, including, inter alia:

ii.China has internal waters, territorial sea and contiguous zone, based on Nanhai Zhudao;

iii.China has exclusive economic zone and continental shelf, based on Nanhai Zhudao;

iv.China has historic rights in the South China Sea2.

The first part of the claim, sovereignty over the Nanhai Zhudao (the South China Sea archipelago), is relatively straightforward. The other claimants in the South China Sea may dispute it, but the Chinese claim is put forward in a manner consistent with similar claims elsewhere. The rest of the statement is more problematic. Firstly, the Chinese government appears to be saying that all the features in the South China Sea form a single archipelago and that collectively they generate their own territorial sea. However, it is clear from hydrographical charts that the island groups are distinct and separated by areas of very deep water. Moreover, there is no provision anywhere in the text of UNCLOS for groups of islands to have a ‘collective entitlement’. The Chinese statement then creates further difficulties by extending the ‘single archipelago’ position to claim that is entitled to an Exclusive Economic Zone. Again, there is no provision for this in UNCLOS. Finally it makes the bald statement that “China has historic rights in the South China Sea” but without stating what they comprise or where they extend to.

In summary then, the 2016 Chinese position appears to contain at least two legal innovations: firstly that groups of islands can generate a collective territorial sea and EEZ and, secondly, that China has unspecified ‘historic rights’ that go beyond the rights accorded to it by UNCLOS. These are not merely obscure legal developments. In recent years we have seen Chinese state agencies apparently acting upon these arguments during confrontations in the South China Sea.

For example, China has objected to oil and gas drilling off the coasts of Vietnam, Indonesia, Malaysia, Brunei and the Philippines on the grounds that such activities violate its historic rights. In 2008 the Chinese government successfully forced BP to stop its oil and gas production in an area of the sea known as the Vanguard Bank. In 2015 a similar fate befell a London-listed company, Forum Energy plc, when it was preparing to drill on an area of seabed called the Reed Bank off the Philippines3. There have also been confrontations between Chinese and Indonesian coastguards over fishing activities near the Natuna archipelago. These are all areas in the southern part of the South China Sea, lying hundreds of nautical miles outside any EEZ claim that could be made from the Chinese coast.

The Philippines’ arbitration case and the Chinese response

It was to try to resolve this situation that the Philippines brought a legal action against China in early 2013. China refused to participate in the case but it went ahead nonetheless and a specially convened International Arbitration Tribunal delivered a ruling in July 20164. Its two key findings were, firstly, that none of the features in the Spratly Islands nor the Scarborough Shoal were full islands and that therefore none could generate an EEZ; and secondly, that the ‘U-shaped line’ could not be regarded as a legitimate claim to the resources within it under UNCLOS. The judges found that:

China’s claims to historic rights, or other sovereign rights or jurisdiction, with respect to the maritime areas of the South China Sea encompassed by the relevant part of the “nine-dash line” are contrary to the Convention and without lawful effect to the extent that they exceed the geographic and substantive limits of China’s maritime entitlements under the Convention5.

Chinese government officials rejected the ruling immediately. At an official briefing at the State Council Information Office, Vice-Foreign Minister Liu Zhenmin twice called it “nothing more than a piece of waste paper” and one that “will not be enforced by anyone”.6 More importantly, Chinese state agencies have continued to act in defiance of it. In 2017 and 2018 Vietnam was forced to suspend drilling by the Spanish company Repsol off its south-eastern coast because of threats of military force from China. The Philippines has been unable to authorise new exploration on the Reed Bank for the same reason and oil companies operating off Malaysia and Brunei have also come under the same pressures.

In May 2018, when asked about plans by the Russian company Rosneft to drill in an area of sea next to the Repsol concession, the Chinese Foreign Ministry spokeswoman said, “no country, organization, company or individual can, without the permission of the Chinese government, carry out oil and gas exploration and exploitation activities in waters under Chinese jurisdiction”.7 She did not explain, however, why a piece of seabed over 600 nautical miles from the Chinese coast should fall “under Chinese jurisdiction”. Given the Chinese government statement of July 2016 we can suppose there are likely to be two justifications: that the area lies within 200 nm of the Spratly Islands when taken as a collective whole and/or that it lies within an area over which China claims ‘historic rights’. These are two quite different arguments that have quite different roots.

The PRC’s archipelagic arguments

The argument that groups of islands are entitled to collective rights seems to have emerged in the Chinese media in the immediate aftermath of the arbitral tribunal’s ruling. On 18 July 2016 an article was published in the Chinese military newspaper People’s Liberation Army Daily. It was ascribed to members of the “Centre for Research on the Theoretical System of Socialism With Chinese Characteristics” at the Central Communist Party School. It was not a government statement but in the view of the analyst Andrew Chubb, “could end up being close to the interpretation the PRC goes forward with”. Chubb notes that he had heard the argument “numerous times” before July 2016 but that this was the first time to his knowledge that it had appeared in print.

The article was written as a response to the arbitral ruling and was published after the government statement of 12 July. It differs from that statement by arguing that, rather than treating the entire South China Sea as a single archipelago, each island group should be regarded separately. It doesn’t even take the Spratlys as a single group, arguing that smaller clusters within the Spratlys should provide the basic unit of the claim. It argued that,

China has the right to take those groups of islands within the Spratlys that are relatively close to each other as a single entity to establish territorial sea baselines, and China’s Spratly Islands have maritime administrative zones such as territorial seas, EEZ and continental shelf.8

Further work needs to be done on the origins of this argument. It merges elements of customary international law with innovations in the interpretation of UNCLOS. It has minimal support in the international legal community outside China but may well come to form the basis of the state’s main legal position.

The ROC’s historic waters arguments

The other basis for the claim, that “China has historic rights in the South China Sea”, has a quite separate genealogy. It emerged, not from the People’s Republic of China but from Taiwan. The phrase ‘historic waters’ first appeared in a Republic of China government document in March 1993.9 It almost became part of Taiwanese law but the concept was eventually rejected. Instead, it took on a new life on the other side of the Taiwan Strait.

Taiwan’s policy on the South China Sea began to evolve in 1988, following the dramatic arrival of forces from the PRC in the Spratly Islands. The PRC occupied Fiery Cross Reef in late 1987 and five more features in early 1988. When its units landed on Johnson Reef South on 14 March 1988, they clashed with Vietnamese forces and 64 Vietnamese marines were killed. At the time (and to this day) Taiwanese forces occupied a single feature in the Spratlys: the largest island, Itu Aba. The Chinese occupations gave added urgency to the need to consolidate Taiwan’s maritime policies and bring them into line with the new rules agreed in UNCLOS in 1982.

In July 1989, Taiwan’s Ministry of the Interior deputed its Land Administration Department to convene a committee to demarcate Taiwan’s territorial sea and Exclusive Economic Zone.10 According to Kristen Nordhaug there were three legal scholars attached to the committee: Fu Kuan-Chen, Nien-Tsu Alfred Hu and Huang Yi. At the time, Fu and Hu were both affiliated with what was known as the non-mainstream wing of the governing Guomindang (KMT) Party.11 This faction was linked to the party’s ‘old guard’, which supported a ‘one-China’ policy: the eventual unification of Taiwan with the mainland. During 1991–2 the ‘non-mainstream’ would fight a bitter battle with the new KMT leadership against its policy of ‘Taiwanisation’ – moves towards greater independence – and many members, including Fu, would split to form the New Party in 1993. Fu was elected to the National Assembly in 1992.

Contemporary reports suggest that it was this committee, advised by its ‘one-China’ legal scholars, that first conceived the notion of claiming ‘historic waters’.12 Indeed, in an email to this author, Professor Fu declared, “I am the first scholar in China who brought up the idea of historic water and several other related concepts for resolving the South China Sea issues”. In hindsight, it appears that this innovation in the Chinese claim was largely the work of one man.

An American intervention

At around the same time as the committee was discussing Taiwan’s policy, a tiny American oil company, Crestone, was trying to persuade the PRC authorities to grant it a lease for a block of seabed off the south-eastern Vietnamese coast. The audacity was breath-taking: the block lay just 250 kilometres off the Vietnamese coast and more than a 1,000 kilometres from the beaches of China. The head of Crestone, Randall C. Thompson, began lobbying for the lease in April 1991 but it was not until after the PRC had passed its new Territorial Sea Law, in February 1992, that he finally received it.

The Chinese designated the new exploration block “Wan An Bei-21” (WAB-21). Crestone’s advisors drew its boundaries very carefully. They infringed upon Vietnam’s claimed EEZ but not that of either Indonesia or Malaysia. More importantly the block lay within the U-shaped line. For the first time since it appeared on an official Chinese map in 1948, the line appeared to have become a formal boundary: at the prompting of Crestone, China was for the first time claiming rights to resources within it.

One of Crestone’s advisors was Daniel J. Dzurek, the former Chief of the Boundary Division of the US Department of State. According to Thompson, “I used him [Dzurek] to help get validity to our concept this is Chinese waters and he strongly espoused many positions that this is Chinese waters, not Vietnamese waters based upon sovereignty of claim and historic stuff”.13 Dzurek, however, has played down his role. In communication with the author he said that he, “never gave China any ‘boundary advice’” but “merely helped negotiate an offshore lease”.14 However the map upon which Crestone outlined the block of seabed it was leasing from the Chinese government incorporated the Ushaped line as a continuous (not dashed) line, annotated with the text “People’s Republic of China Claims”. Furthermore, in a key academic paper published after the Crestone episode Dzurek noted that the Chinese term for the ‘U-shaped line’ might be best translated as ‘traditional sea boundary line’.15 He seems to have accepted – and developed – the idea that China had ‘historic rights’ in the area beyond those spelled out in UNCLOS. However, whatever legal arguments China felt that it had were not made public. It simply issued the lease to Crestone and remained silent on the justification.

Taiwan reaction

In October 1992 an inter-ministerial task force was created under the Taiwanese Ministry of the Interior to coordinate government policy in the South China Sea.16 At around the same time, the government’s policy planning department, the “Research, Development and Evaluation Commission”, published a paper by Fu Kuen-Chen entitled “A Study on the Legal Status of the ROC’s Historic Waters in the South China Sea”.17 After a few months of discussion the task group agreed a set of “Policy guidelines for the South China Sea” on 10 March 1993, which was approved by the government (Executive Yuan) on 13 April 1993. The second paragraph of its Prologue states, “The South China Sea area within the historic water limit is the maritime area under the jurisdiction of the Republic of China, in which the Republic of China possesses all rights and interests”.18

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In a press conference on 10 August 1993, the Chairman of the Research, Development and Evaluation Commission explained the justification for the claim, saying it was based upon the 1948 U-shaped line. He claimed that the maritime area within the line should be regarded as the Republic of China’s ‘historic waters’. These were different to ‘internal waters’ but analogous to ‘archipelagic waters’.19 ‘Archipelagic waters’ was a new category agreed in UNCLOS in which states whose entire territory consisted of islands (such as Indonesia or the Philippines) could claim rights over the waters between their islands. However, such rights did not apply to non-archipelagic states, such as China or Vietnam. In early September 1993, both the Interior Minister, Wu Po-hsiung, and the Premier, Lien Chan, formally opened a conference on the South China Sea in Taipei and both made reference to the waters of the South China Sea long being China’s historic waters.20

This was a quite different interpretation of the meaning of the U-shaped line to that which had been given when it was first drawn in the aftermath of the Second World War. Canadian historian Chris P.C. Chung has examined the recently declassified archives of the Republic of China and found that meetings were held during 1946 and 1947 to define what would become the Chinese claim. In a meeting on 26 September 1946, a government committee agreed to use a “Location Sketch Map of the South China Sea Islands 南海諸島位置略圖” previously drawn up by cartographers in the Ministry of Interior to guide its decision. I have discussed the origins of this map in a separate article.21 This map is the very first Chinese government document to show the U-shaped line and its meaning was clear to that ROC committee: it defined “the scope of what is to be received for the purpose of receiving each of the islands of the South China Sea” (“接收南海各島應如何劃定接收範圍案”). The committee’s interest was only in the islands. They made no mention of waters, historic or otherwise.22

It is clear therefore that, since the concept of ‘historic waters’ was not present in Chinese government thinking in 1946 but was present in 1992, it must have been developed at some point between. The available evidence suggests the innovation came through the interventions of Professor Fu.

An idea crosses the straits

The arguments over whether the Republic of China should claim ‘historic waters’ in the South China Sea lasted for five years and became a proxy fight between the ‘non-mainstream’ KMT, who favoured a ‘one-China’ policy, and those in favour of greater Taiwanese independence. For many in the ‘one-China’ camp, a maximalist claim in the South China Sea was a means of expressing their sense of national belonging and they put their arguments with great passion. Those who favoured independence regarded the maritime claim as a minor issue, largely irrelevant to their main concerns. As a result the South China Sea debate was initially dominated by the ‘one-China’/historic rights/non-mainstream group.23

In the early 1990s, there were parallels in the way the rival governments in Taipei and Beijing developed their internal legislation on their maritime claims. Both proposed two separate draft laws: one on the Territorial Sea and the Contiguous Zone and another on the Exclusive Economic Zone and the Continental Shelf.24 While official policies prohibited direct contact it seems academics, such as Professor Fu, and other intermediaries, such as Crestone, communicated ideas across the Taiwan Strait. In some quarters, the desire for cooperation went even deeper. At a June 1994 joint PRC-Taiwan academic conference in Taipei the political counsellor to the “Administrative Yuan” (the Taiwan state bureaucracy), Zhang Jinyou, reportedly urged the two governments to work together on mapping and jurisdiction in the South China Sea.25

However, the draft laws made no progress between 1992 and 1995. There were two sources of opposition: lawyers who argued that there was no basis in UNCLOS for the ‘historic waters’ claim and also ‘pro-independence’ groups who were opposed to the idea of synchronizing Taiwan’s claim with that of China.26 All talk of cooperation was cut off after June 1995 when the President of Taiwan, Lee Teng-Hui, visited the United States, precipitating crises between Taiwan and China and also within Taiwanese politics. The latter was only resolved through a “National Development Conference” convened in December 1996. This resulted in a compromise between the KMT mainstream and the pro-independence Democratic Progressive Party (DPP) and the isolation of the New Party. The new KMT-DPP consensus was based upon weakening the connections between Taiwan and the PRC and this extended to reducing cooperation over the claims in the South China Sea. Thus Professor Fu and the rest of the New Party were marginalised in the discussion of Taiwanese maritime policy.27

By late 1997, the anti-‘historic rights’ grouping had won. In December local media reported that the government’s task force considered, “a consensus reached earlier in a nonpartisan negotiation to temporarily put aside its sovereignty over the special historic waters”.28 The phrase – and the claim – was removed from Taiwan’s Law on the Territorial Sea and the Contiguous Zone, which was enacted a month later, on 21 January 1998.

However, on the other side of the Taiwan Strait, the equivalent law in the PRC, the “Law on the Exclusive Economic Zone and Continental Shelf”, enacted five months later on 26 June 1998 includes, in Article 14, the wording that the incorporation of UNCLOS rules into Chinese legislation “shall not affect” (bu yingxiang) China’s “historic rights” (lishixing quanli).29 The phrase was inserted only in the final stage of adoption at the National People’s Congress and the Chinese authorities provided no public explanation for the rationale behind it. Its exact meaning remains vague. In the opinion of Zou Keyuan, “China has become the first, and perhaps the only, state to incorporate its historic claims in EEZ and continental shelf laws rather than in separate enactments or government statements”.30 By 1998 then, the concept of Chinese ‘historic rights’ in the South China Sea had been expunged from legislation in Taiwan but had taken on new life in the PRC, where it continues to animate state policy with destabilising results for the region.

Conclusion

It seems clear from the evidence available that the concept of ‘historic rights’ in the South China Sea only emerged in the early 1990s and in Taiwan, not the PRC. It also seems likely that it sprang from the ideas of a single individual, Fu Kuen-Chen, before gaining support from fellow supporters of the ‘one-China’ position within Taiwanese politics. Although the links are not yet solidly established there are grounds to believe that the idea that the U-shaped line formed a ‘traditional maritime boundary’ for a Chinese claim to resource rights was then communicated from Taiwan to the PRC via the interventions of the American oil company, Crestone. Over the following three years, like-minded scholars and officials on both sides of the Taiwan Strait cooperated in developing and promoting the concept.

It was shifts in the internal politics of Taiwan, away from the ‘one-China’ position and towards greater autonomy or independence, that terminated the development of the ‘historic rights’ argument on the island. Under attack from both the ‘anti-China’ camp and legal scholars who disagreed with the basic argument, it disappeared from mainstream political discourse, remaining alive only among supporters of the New Party and its affiliates.

However, by 1998 the concept had already taken root in the PRC. In 2002, Fu Kuen-Chen followed it. He demonstrated his ‘one-China’ views by taking up academic positions simultaneously at both Xiamen University Law School in the PRC and the National Kinmen Institute of Technology, which is located on the Taiwan-held island of Kinmen just 10 kilometres across the bay from Xiamen. He continues to teach in Xiamen and at Shanghai Jiao Tong University, both located in Mainland China. He maintains his ‘historic waters’ arguments and his maximalist version of the Chinese territorial claim in the South China Sea.31

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NOTES

(*) Bill Hayton is an associate fellow of Chatham House. He is the author of two books on Southeast Asia: South China Sea: The struggle for power in Asia (Yale, 2014) and Vietnam: Rising Dragon (Yale, 2010). He also works as a journalist for BBC News.

1.United Nations Convention on the Law of the Sea, 1982. Article 121(3).

2.People’s Republic of China, Statement of the Government of the People’s Republic of China on China’s Territorial Sovereignty and Maritime Rights and Interests in the South China Sea 12 July 2016. http://www.fmprc.gov.cn/mfa_eng/zxxx_662805/ t1379493.shtml.

4.Formally an ‘Arbitral Tribunal Constituted Under Annex VII To The 1982 United Nations Convention On The Law Of The Sea’, Permanent Court of Arbitration case 2013-19. Documents available online at http://www.pcacases.com/web/view/7 [as at 24 May 2018].

5.Permanent Court of Arbitration, Award In The Matter Of The South China Sea Arbitration, CA Case No 2013-19. 12 July 2016, p. 473.

6.Liu Zhenmin, remarks at a State Council Information Office briefing on the South China Sea disputes, Beijing 13 July 2016. http://www.scio.gov.cn/32618/ Document/1483804/1483804.htm [accessed 24 May 2018].

24.Yann-Huei Song and Zou Keyuan, ‘Maritime Legislation of Mainland China and Taiwan: Developments, Comparison, Implications, and Potential Challenges for the United States’. Ocean Development & International Law Vol. 31. Issue 4 (2000): 311.